Austrian cellulosic fibre producer Lenzing Group has temporarily postponed its lyocell expansion project in Mobile, Alabama, due to what it called the “rising likelihood” of increasing trade tariffs, paired with the potential surge in construction costs due to the buoyant US labour market.
The factors, Lenzing says, have increased the risk profile of the project and as a result, the firm’s managing board has decided to temporarily mothball the project.
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Lenzing will reassess the decision on a regular basis but says no substantial additional lyocell volumes, over and above the successful 25,000 tonnes expansion in Heiligenkreuz, Austria, will be added to the market in 2019 and 2020 by the company.
Consequently, the firm is to put all its effort into readjusting the execution of its growth plan to meet market demand for its lyocell fibres, including an increased focus on its expansion project in Prachinburi, Thailand.
“Lenzing continues to be fully committed to implement its sCore Ten strategy and remains on track for the speciality expansions such as Tencel Luxe filaments and Lenzing Ecovero viscose fibres, however this decision will slow down the implementation of the lyocell speciality staple fibre growth,” it said.
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By GlobalData
